Invest on other house, secure your future

Property can be a great source of income for people who could be laid off at a moment's notice; in fact, thousands of people have lost their jobs since 2008.

From an investment point of view, if possible, you should buy another house before retirement. Those who do not stand to get a pension have all the more reason to buy another property before retirement, as a second home will give them financial security in the form of a regular rental income once they retire.

It goes without saying that those who invest in property cannot be losers, as immovable property is a huge asset one can bank upon when the chips are down. Also, property can be a great source of income for people who could be laid off at a moment's notice; in fact, thousands of people have lost their jobs since 2008.

Timing is also very important in the decision to buy property; people who wait endlessly for interest rates to come down or for price corrections in the real estate market invariable end up ruing missed opportunities.

"Those who invest in realty should have a longer period of time to enjoy the benefits of appreciation, as this is a long-term game. One should not expect miracles in short span. It wouldn't make any sense for a 60-year-old to invest in a property to earn rental income as real rate of return would not be profitable," says Devinder Gupta, the MD of Century 21 DGS.

Gaurav Mittal, the CEO of CHD Developers , says: "If you are planning for a second property, you should not mind investing on the outskirts of your city. With the passage of time, most cities expand and gradually incorporate the outskirts into the main city. You meet many people in various trans-Yamuna colonies, who will tell you that they came to that part of the city when it was without any worthwhile social or physical infrastructure.

Today, it is a different story there. With development , the value of their properties has gone up many folds, which has transformed the class character of a large number of people who invested here several years ago. As the rates go up in the main parts of the city, one should not mind investing in outer or little known areas of the city."

Nevertheless, experts say prospective buyers of second homes must invest very carefully. They must invest in only those projects which are handled by builders and developers with proven track record, they caution.

Nikhil Jain, the CEO of Ramprastha Group, says: "I have observed that the number of people buying a second home in the NCR is going up by the day. This is a clear indication that the present generation know for sure that investment in property would help their cause when the chips are down."

Experts also say that land can be another option for those looking for a second property with a specific goal. Between land and constructed property, experts give the thumbs up to land as a more lucrative option as it is much easier to sell it and also because its rate of appreciation is higher.

If you live in Delhi, they strongly suggest that if plots are available anywhere in the NCR, then you must invest in them, as they will yield very good returns in the future.

Realty experts also say that one should focus on buying a second or third property very early in one's career . For example, one should start thinking of buying a second property before reaching the age of 50. In this way one gets enough time to repay all loan liabilities before reaching the retirement age, they say.

"If you look back to the period 15-20 years ago, you will realize that earlier people were satisfied after buying one property," one developer says. "As salaries have gone up over the years, and there has been a significant rise in disposable income of the salaried class, there has been a paradigm shift in the attitude of people in terms of investing in realty. If the average investor used to settle for one property earlier, the average investor today has been investing in multiple properties ," the developer says.

Today, many people are investing in property with a clear vision that their investment would be a source of income in their retired life. With higher disposable incomes and more loan options, a larger number of families have adopted this approach.